Credit Suisse's Top Holdings: A Brief Analysis

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by: Efsinvestment

The investment banks which barely survived the financial crises are back on their feet. In 2010, the total fees charged by the industry increased by almost 6% to $49.1 billion. Not only the U.S. companies, but also European companies started making decent profits.

Credit Suisse was the seventh most profitable company in stock equities and bond underwriting. Last year, the company earned $2.56 billion in advisory fees. According to Zacks research, this year, earnings are expected to grow by 23%, and long-term consensus earnings growth is 10%. Credit Suisse is one of the largest institutional investors in the stock market with 745 billion CHF (~$810 billion) in current assets. The investment titan offers several mutual funds and private wealth management. According to the latest report submitted to I-Metrix Edgar-Online, Credit Suisse's top equity holdings are as follows:

STOCK/ETF

Ticker

Sector

Value($ million)

YTD Return

Profit / Loss

SPDR S&P 500

SPY

Financial

1,835

4.54%

79.69

UBS AG

UBS

Financial

1,097

12.63%

123.1

COCA COLA

KO

Consumer G.

852

-0.93%

-8.00

POWERSHARES QQQ

QQQ

Financial

849

1.88%

15.67

GOOGLE

GOOG

Technology

795

-1.19%

-9.57

IBM

IBM

Technology

771

9.48%

66.76

ISHARES MSCI

EEM

Financial

551

-0.52%

-2.88

EXXON

XOM

Energy

437

13.73%

52.76

SCHLUMBERGER

SLB

Energy

401

5.80%

21.98

UNITED TECH.

UTX

Conglomerates

373

5.66%

19.98

TRANSOCEAN

RIG

Energy

372

15.45%

49.78

PEPSICO

PEP

Consumer G.

371

-0.97%

-3.63

CONOCOPHILLIPS

COP

Energy

338

18.07%

51.73

GENERAL ELECTRIC

GE

Conglomerates

327

8.92%

26.78

UNITED PARCEL

UPS

Services

292

0.04%

0.12

JOHNSON & JOHNSON

JNJ

Healthcare

290

-3.70%

-11.14

ISHARES S&P Midcap

IJH

Financial

255

6.17%

14.82

WAL-MART

WMT

Services

253

-1.79%

-4.61

NORTHROP GRUMMAN

NOC

Conglomerates

252

5.78%

13.77

INTEL

INTC

Technology

243

-2.25%

-5.59

APPLE

AAPL

Technology

232

6.95%

15.08

MICROSOFT

MSFT

Technology

220

-6.99%

-16.53

OCCIDENTAL

OXY

Energy

218

2.18%

4.65

MCDONALDS

MCD

Services

208

-1.59%

-3.36

MEDTRONIC

MDT

Healthcare

168

3.66%

5.93

ABBOTT LABS

ABT

Healthcare

167

1.35%

2.22

PROCTER & GAMBLE

PG

Consumer G.

162

-4.26%

-7.21

BARRICK GOLD

ABX

Basic M.

157

-2.73%

-4.41

NIKE

NKE

Consumer G.

153

-9.86%

-16.74

MERCK

MRK

Healthcare

153

-8.14%

-13.56

CHEVRON

CVX

Energy

151

16.35%

21.22

EMC

EMC

Technology

150

18.12%

23.01

TECHNOLOGY SPDR

XLK

Financial

135

2.83%

3.72

RIO TINTO

RIO

Basic M.

122

-3.41%

-4.31

PFIZER

PFE

Healthcare

118

17.14%

17.27

JPMORGAN CHASE

JPM

Financial

116

7.93%

8.52

KRAFT FOODS

KFT=

Consumer G.

115

-0.73%

-0.85

CITIGROUP

C

Financial

115

-6.34%

-7.78

CISCO

CSCO

Technology

115

-14%

-19.02

WEATHERFORD INT.

WFT

Energy

112

-8.64%

-10.59

TOTAL / AVERAGE

14,041

2.66%

488.69

Value Weighted

3.48%

Click to enlarge

Credit Suisse's equity portfolio has substantial differences with Deutsche Bank’s (NYSE:DB) investments. Similar to JPMorgan (JPM), Goldman Sachs (GS), and Morgan Stanley (MS), Credit Suisse, holds SPY as one its largest holdings. The second largest equity is UBS. Credit Suisse holds $1.1 billion UBS stocks. Since January, UBS share prices shares soared up by 12.63%, bringing in $123 million of profits.

The year-to-date performance of the Credit Suisse’s portfolio is slightly better than that of Morgan Stanley. The value-weighted average yield of the portfolio is 3.48%. SPY returned 4.54% in the same period. The sectoral breakdown of the top 40 holdings can be visualized as such:


Click to enlarge

Credit Suisse's investment managers prefer to invest in financial sector, followed by technology and energy stocks. Google (NASDAQ:GOOG) is the largest technology holding, followed by IBM. Since January, Google shares lost by 1.19%, whereas IBM shareholders experienced a marvelous capital gain of 9.48% boosting the Credit Suisse’s portfolio by $66.76 million.

The best performer in the portfolio was Pfizer (NYSE:PFE), whose shares gained a stunning 17.4% in 2011. Pfizer holdings rewarded Credit Suisse’s portfolio with an extra capital gain of $17.27 million. The following graph shows the year-to-date profit / loss performance:
Performance Analysis
Click to enlarge

Financial equities offered the highest capital gains, followed by the energy stocks. The rate of return on energy stocks was fantastic. Exxon (NYSE:XOM) [13.73%], Transocean (NYSE:RIG) [15.45%], Conocophillips (NYSE:COP) [18.07%], and CHEVRON (NYSE:CVX) [16.35%] offered fantastic capital gains in the amount of $52.76, $49.78, $51.73, and $21.22, respectively.

Similar to Deutsche Bank, Credit Suisse is also stubbornly bullish about emerging markets. Holders of Ishares MSCI emerging market ETF (NYSEARCA:EEM) made incredible profits in 2010. However, the year-to-date performance was -0.52%, which means a capital loss of $2.88 million for Credit Suisse. If you are a contrarian investor willing to invest abroad, EEM can be a good starting point. With a relatively low expense ratio of 0.69%, EEM gives us an opportunity to invest in China, Brazil, South Korea, Taiwan, Russia, and Turkey. If 0.69% is too much for you, you can make direct investment by purchasing the top equities: Petrobras (NYSE:PBR), Vale (Vale), America Movil (NYSE:AMX), Banco Itau (NYSE:ITUB), and Taiwan Semiconductor (NYSE:TSM) are among the top stocks in the EEM fund.


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I am long on several emerging market stocks whose share prices are closely correlated with Ishares MSCI emerging market ETF (EEM).